Altium – Valuation View

Posted on | by Leon Hinde

Altium is under current Algo Engine buy conditions and the positive price momentum and recent inclusion into the ASX 100 index, has us digging a little deeper into the fundamentals.

The stock trades at a lofty PE valuation of 56x forward earnings. However, the company has a strong track record of above average EPS growth. FY20 the market is looking for EPS to increase 20% from $0.41 to $0.50 cents per share. FY20 revenue is forecast to jump from $175m to $215m .

The stock currently trades on a  dividend yield of 1%.

We’re comfortable to view this as a momentum play and remain long the stock whilst it trades above our $29 stop loss.

 

 

 

Coles Group – Valuation Review

Posted on | by Leon Hinde

Coles Group has been a stand alone listed business since November 2018, after being spun-out of Wesfarmers.

The financial performance to date has been patchy at best and the recent Coles Strategy Day highlights were the confirmation of the dividend payout of 80-90% for FY19, (which translates to an estimated $0.55 per share or 4.1% yield) and the $1bn cost out program.

We forecast flat earnings and revenue growth into FY20 and suggest investors sell a covered call option to enhance the income return.

 

 

 

 

AGL – Algo Buy Signal

Posted on | by Leon Hinde

AGL Energy is now under Algo Engine buy conditions, following the recent sell-off from $23 down to $20.50.

We recommend buying AGL and selling an out of the money call option to enhance the income return.

AGL goes ex-div  $0.63 on the 22nd August.

For more information on the option strategy, please call our office on 1300 614 002.

Macquarie Group – Algo Buy Signal

Posted on | by Leon Hinde

Macquarie Group has sold off from $137 down to $114, following a software outlook for next year’s earnings.

Although it is unlikely they’ll deliver 17% EPS growth, it is probable that we’ll see growth within the 5 – 8% range, which will continue to ensure Macquarie Group’s shares remain attractive.

We have the stock trading on a 5% yield into FY20.

Text from a post last month…. Allowing for continued short-term selling in global markets, we suggest investors add MQG to their watch lists and look for the short term momentum indicators to reverse high within the $116 – $120 range. 

We’re now at the point described above. MQG is trading at $114 and looks like buying interest will build near the current price level.

OceanaGold – Algo Buy Signal

Posted on | by Leon Hinde

OceanaGold is under Algo Engine buy conditions and is seeing increased buying interest as the stock rallies from the $3.90 support level.

Gold prices hit a three-month high this month as investors flee to the safe-haven bullion amid escalated trade tensions and lower global interest rates.  Additionally, if we see the US dollar weaken, gold will appreciate as it becomes cheaper for investors holding other currencies. 

Buy OceanaGold and look for a rally to $4.50+

Wesfarmers – Opportunity Approaches

Posted on | by Leon Hinde

Wesfarmers is currently under Algo Engine sell conditions and the recent sell-off from $38.80 may soon see a new buying opportunity emerge.

The market is in the process of repricing Wesfarmers, following tougher trading conditions, which were highlighted during the strategy day presentation.

The earnings update included downward guidance to the department store division and general headwinds across a number of the Wesfarmers businesses. Investors also need to consider the supply chain investment and system upgrades, as capex spending is set to increase.

We anticipate an overreaction to the sell side and therefore, a buy opportunity may soon approach. Keep Wesfarmers on your radar and watch for the next Algo Engine buy signal.

Wesfarmers trades at 21x earnings and on a 4% yield. EPS growth should remain around 4 -5% and we see support for the share price at $34.00

 

 

 

Catapult Group International – Algo Buy Signal

Posted on | by Leon Hinde

Catapult Group International has now switched from sell to buy conditions and is showing in our “Recent Signals” list.

CAT is a global sports analytics company that provides elite sporting organisations and athletes with detailed, real time data and analytics to monitor and measure athletes. Its products have been used by more than 500 sports teams and organisations worldwide. Its product suite encompasses a range of hardware and software solutions.

Generally, we don’t spend much time on the smaller cap stocks, however, we draw your attention to this one and highlight the need to run a stop loss on a break in price, below the $1.06 support level.

Carsales.com – Algo Sell Conditions

Posted on | by Leon Hinde

Carsales.Com is under Algo Engine sell conditions following the lower high formation at $13.50.

Earnings guidance provided by Carsales for FY19  are for EBITDA of $210mn and  NPAT of A$131mn. Revenue guidance was a little weak, indicating full year profits are being supported by cost out initiatives.

We will review CAR on the price retracement & Algo Engine buy signal.

 

Crown Resorts – Algo Buy Signal

Posted on | by Leon Hinde

Crown Resorts is now under Algo Engine buy conditions and we continue to see upside opportunity in the share price.

CWN goes ex-div $0.30 on the 20th September and the stock trades on a forward yield of 4.5%.

Note: There is a price gap back to $11.80. With the stock trading $11.90 today we’ve almost seen the price gap closed. Expect a rally from $11.80, we view this level as a discounted entry point.

Buy Crown between $11.80 & $12.00.